The hospitality industry showed further signs of a tentative recovery this week, despite increases sales of distressed assets, as well as a small rise in hotel insolvencies.
Property agent Christie & Co revealed that the number of distressed asset sales in the hospitality and retail sector has shot up 126% in the six months to September 2010, with pub sales driving the increase.
The news pointed not only to a high volume of businesses still failing as a result of the tough economic climate, but also increasing interest from buyers.
Sales in the pub sector rose 189%, making the 88% rise in hotels and 67% jump in restaurants seems modest by comparison. Christie & Co also achieved 88% of the asking price on distressed asset sales over the period, a rise from 81% the previous year.
Steve Rodell, head of bank support and business recovery at Christie & Co, said: "Many businesses have already faltered as a result of the tough economic climate, and many more are expected to fall by the wayside over the next six to 12 months. However, as our data shows, distressed assets continue to appeal to experienced operators and those looking to start their first business, with a marked rise in buyers returning to the market during 2010.
Meanwhile, the number of hotel and leisure insolvencies increased slightly last month. According to the latest Insolvency Index from Experian, 113 hotel and leisure businesses went under in September, compared with 105 in August.
Year-on-year, September's 113 insolvencies were ahead of 2009's 107 also, although the trend in recent months has shown a gradual recovery, with insolvencies within the hotel industry falling.
Recent exclusive research for Caterer and Hotelkeeper revealed cautious optimism among operators, who remain fearful of the effect of public sector cuts on trade next year.
By Neil Gerrard
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